Do you ever have those days when it seems like you just can’t get ahead? I’ve been there. You finally respond to all your voicemails only to find 50 new emails waiting for you…
Most agents gravitate towards the real estate industry because they love getting out in the community and talking to people. The reality is, real estate is based on legal transactions which require a lot of office work.
Answering emails and scanning documents is not as exciting as showing homes and closing deals. Still, it’s necessary work. If you are feeling overwhelmed, you may have toyed with the idea of hiring an assistant for your business. Is this the right move or a costly disaster waiting to happen?
Before hiring anyone you should first determine how much your time is worth.
How Much is Your Time Worth as an Agent?
When you got your first job in high school or college, you knew exactly how much your time was worth. You got paid by the hour. Simple and straightforward. When it comes to forecasting your value as a real estate agent, however, the formula is a little more complicated.
In our society, most people are compensated with an hourly wage or a salary. With these payment structures, it’s easy to break down how much someone earns in an hour or even in a minute. As a real estate agent, you make a living from commission cheques. Some months, life is good and cash is flowing in. Other months, deals fall apart and the commission never comes. So, how can you tell what an hour of your time is worth?
Calculating A Real Estate Agent’s Hourly Rate
When you are calculating your hourly rate, you will want to deal with averages as much as possible. Due to the fact that commission earnings vary so much from month to month, you should use an entire year’s worth of earnings when calculating your rate.
Let’s use an example of an agent who brought in $120,000 in sales volume last year. This agent works 5 days a week, for an average of 8 hours a day, and took two weeks vacation.
120,000 / 12 months = 10,000
120,000 / 50 weeks = 2,400
2,400 / 5 days = 480
480 / 8 hours = 60
Based on the calculations above, this agent earned approximately $10,000 a month, $2,400 a week, $480 per day, and $60 per hour.
How Are You Spending Your Time?
Next, I would recommend a full audit of your daily tasks. Most agents wake up in the morning, get coffee in their cups, and start going about their day without considering the value of each action.
Calling a client has a lot more value to your real estate business than picking up your dry cleaning or filing paperwork. As you go through a normal day, take note of every single task you need to complete. Write them all down and then try to put a rough dollar amount beside each action.
This doesn’t have to be exact but it should make it clear which tasks directly result in commissions and business development.
Now that you have your list, how many tasks do you complete in the day that doesn’t require your input specifically? A classic example is filing paperwork- almost anyone can be trained for this task.
If a large portion of your day is filled with remedial tasks, adding an assistant to your team might be a good idea.
How Real Estate Agents Can Maximize Their Time
Let’s say you earn approximately the same amount as the agent in our example above. Do you think someone who is being paid $60 per hour should be filing paperwork? No, an agent of this caliber should be focused on creating new opportunities and closing current sales.
You might balk at the idea of paying someone $25 dollars an hour to assist you in your business. But what if this person could free up an extra 4, 5, or 6 hours of your time per day? And what if you spent all of those extra hours locally marketing yourself and closing deals? The potential value of a real estate assistant quickly becomes apparent when you walk through exercises like this.
In order to maximize your value, you should hire someone for the tasks that can be completed by an employee who is happy to earn $20-30 per hour. Once you have freed up these extra hours, you can then focus on the activities that directly contribute to earning more commissions.
The Advantages of a Real Estate Assistant
Deciding to bring an assistant onto your team brings a whole host of benefits including:
- Potential for increased productivity
- Increased perception of professionalism when phone/email answered
- The creation of a social dynamic in your workspace
- Potential to reduce stress levels
- Increased flexibility. Take the afternoon off while your assistant answers the phone
- Build Your Business. If you are hoping to own a brokerage one day, this could be your first step
The Disadvantages of a Real Estate Assistant
There is a long list of benefits that come with hiring an assistant for your business, especially if your hourly rate is high like the agent in our example. However, there are some potential downsides that every real estate professional should consider before committing to a full-time employee.
- Cost of vacation pay and sick days
- Employee insurance and benefits
- Time required to managed and maximize employees
- Extra office space required
- Additional office supplies and admin costs
Is It An Expense Or An Investment?
If you are ready to grow your business and become the local leader of your community, you will have to learn how to manage others eventually. A business operator would look at these potential disadvantages as costs to the business. They would highlight the potential risks.
On the other hand, an agent with an entrepreneurial spirit would see these costs as an investment in their business. Yes, there are a few risks but in most cases, the rewards outweigh the downside.
You can only work so many hours in a day. To grow your business I would highly recommend hiring some sort of assistant. There is a beautiful peace of mind that can be achieved when someone else takes care of the tasks you dislike, leaving you time to focus on what you do best.